June 7, 2004 – Finance Digest
June 7, 2004
Filed under Features
Kawasaki’s Profit Falls
Japan’s Kawasaki Heavy Industries (KHI), a powersports and large equipment manufacturer, reported its annual net profit fell 51% from a year earlier due to fewer industrial orders and a strong yen.
The company, which earns more from aerospace, shipbuilding, gas turbine and railway carriage production than it does from powersports, said its net profit in the year ending March 31 shrank to 6.3 billion yen ($56 million). Recurring profit fell 25.3% to 12.1 billion yen as revenue declined 6.4% to 1.16 trillion yen.
The strong yen, which gained some seven percent against the dollar, reportedly cut about 10 billion yen off profits.
While KHI’s worldwide sales of motorcycles, which account for less than a quarter of the company's revenues, rose 0.6% to 334,000 units, the company’s total domestic sales fell 8.7% to 23,000; North American sales fell 7.6% to 99,000 units; European sales rose 6.0% to 70,000 units; and sales to other regions rose 4.9% to 149,000 units.
Kawasaki continues to forecast a 6.0% increase in revenue to 1.23 trillion yen in the year to March 2005, estimating net profit to be 10 billion yen and recurring profit to be 16 billion yen due to what were described as reforms aimed at boosting efficiencies.
Suzuki Posts Record Earnings
Suzuki Motor Corp. (SMC) reported group operating profit for its year ended March 31 climbed 26.9% to 95,140 million yen while net profit surged 41.3% to 43,835 million yen on sales of 2,198,986 million yen, which were up 9.1%.
Cuts in manufacturing costs and exchange gains due to the euro's depreciation more than offset a rise in research and development costs and other expenses, the company said.
SMC’s worldwide motorcycle sales rose 19.9% to 416.9 billion yen; its auto sales grew 6.6% to 1.72 trillion yen.
For the current year, Suzuki expects that group operating profit will grow 5.1% to 100 billion yen on flat sales of 2.2 trillion yen. Net profit is estimated to increase 36.9% to 60 billion yen. The company anticipates that domestic sales will fall 2.7% to 800 billion yen and overseas sales will rise 1.7% to 1.4 trillion yen.
According to a prepared statement, it will raise its capital spending to 159 billion yen from the previous year's 114.9 billion yen, with most of the increase to be invested in foreign markets such as India, Hungary, Indonesia and China.
Edelbrock earnings climb
Edelbrock Corporation (Nasdaq:EDEL), Torrance, Calif., reported revenues for its fiscal 2004 third quarter, ended March 24, increased 11.3% to $28.5 million from $25.6 million in the comparable period of fiscal 2003. Net income for the third quarter of fiscal 2004 increased to $905,000, or 16 cents per diluted share, from net income of $210,000, or four cents per diluted share, during the previous year period.
The results for the quarter were helped by a pre-tax gain of $315,000 on the sale of a real estate asset (approximately $198,000, or four cents per diluted share, after tax), the company said.
For the nine months ended March 25, 2004, revenues rose 6.5% to $87.9 million from revenues of $82.5 million in the first nine months of fiscal 2003. Net income for the fiscal nine month 2004 period increased 17.6% to $2.6 million, or 48 cents per diluted share, from net income of $2.3 million, or 41 cents per diluted share, in the same period a year ago.
Results for the nine month period ended March 25, 2004, reflected gains on the sale of real estate assets totaling $453,000, or approximately $285,000, or five cents per diluted share, after tax.
Edelbrock said its improved sales were due to improvements in the national economy and favorable weather conditions. However, management noted that earnings growth was hampered by continuing increases in worker's compensation and overall insurance costs.
ProQuest 1Q earnings flat
ProQuest Company, a publisher of information services for the powersports, education, automotive markets, reported revenue for its first quarter ended April 3, 2004, was up 4% to $116.2 million, compared to $111.8 million for the prior year's first quarter. Company officials reported net earnings increased to $11.5 million or 40 cents per fully diluted share, from net earnings of $11.2 million or 40 cents per fully diluted share in the first quarter of fiscal 2003.
For the remainder of 2004, ProQuest foresees organic revenue growth in a range of 5% to 7%; earnings per share growth of 10% to 13%; and a cash conversion rate (defined as free cash flow as a percentage of net earnings) of 75% to 90%.
KTM Begins Trading in Austria
The Vienna Stock Exchange admitted the five-year bond for regulated over-the-counter trading on the Vienna Stock Exchange. It was listed for the first time on May 11.
The 90 million euro bond issued by KTM, the first issued by an Austrian company to be offered to the public this year, was oversubscribed more than twice, with foreign investors showing a strong interest, KTM said.
KTM previously said resources from the bond will be used for further expansion as well as for improvement of the company’s financial structure.
The greatest part of the new capital will be used for development of new street motorcycle models as well as for expansion of the sales network in eastern Europe, a reported the Austrian News Service. The expansion will start with the set up of sales units in Slovakia and Hungary, followed in the mid-run by sales units in the Czech Republic and Poland. The company plans also to begin operations in Portugal.
KTM reported a $11.47 million after-tax profit for the first quarter of fiscal 2003/04, started September 1, 2003, up from $10.76 million during the same period of the previous year. Revenue during the period was $125.35 million, up from $115.06 million.